Social Security Disability vs. Private Disability Insurance

June 7, 2019
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Nobody expects to or wants to, become disabled during their employment and many go to great lengths to keep themselves safe. Unfortunately, it is impossible to protect one’s self from all possibilities of becoming disabled. Disability can be caused by a genetic issue, a workplace accident, a car wreck, or even a multitude of other situations that are beyond anyone’s control such a mishap in the home. It is possible however to have protection against the risk associated with the inability to work and gain a salary.

Multiple options can be available to people who end up losing income due to a disability, but there can be some key differences between Social Security Disability (SSD) and a plan that offers private disability insurance (PDI). Unfortunately not everyone’s employer will offer PDI, but there are insurers who offer disability insurance to those willing to pay for it. Sometimes peace of mind and the protection offered by a PDI plan is well worth the extra expense.

One of the first notable differences is that an SSD will not be approved unless the disability is expected to last for a considerable amount of time. It is not a requirement that an applicant for SSD is permanently disabled – though most people on SSD do receive benefits until they can begin to collect their retirement benefits. The expected disability length needs to be at least a year to be considered for SSD. Under a PDI plan, these benefits are typically paid out as soon as the disability occurs over a set limit of time determined by the type of plan set up with the insurance provider and typically do not have a minimum expected disability length. Many insurers offer both short-term and long-term plans for PDI.

An Advantage of a PDI (private disability insurance) over Social Security Disability

One of the main advantages that PDI has over SSD is that the Social Security Administration makes it a requirement that applicants show total disability, meaning that the applicant cannot maintain any gainful employment at all, cannot adjust to a new form of employment, and will not return to employment within a year. With PDI it is not necessary for the policyholder to be completely disabled. A PDI policyholder can begin receiving benefits throughout a time where a condition prevents them from working only temporarily – even if they plan on returning to work as soon as the disability is resolved, does not have to lose their job, and does not have to prove they are unable to get a new job in order to be approved.

Often the forms required for PDI are provided by the insurance company, are relatively simple to fill out, and can be sent in easily with supporting medical records. Applying for SSD is significantly more difficult and an applicant may want to consider seeking out a Social Security Disability attorney who has the knowledge needed to send in a strong case in order to avoid a denial from the Social Security Administration. While a denial on an application does not need to be the end of the process, it can be frustrating and delay receiving the deserved benefits.

Another advantage is that PDI often pays out more than SSD would. There are many insurers for PDI that offer plans covering up to seventy percent of the insured’s salary at the time that the disability occurred. On the other hand, SSD benefits are calculated off of the average lifetime earning but do have a limit on them.

The Social Security Administration has a “Blue Book” of conditions and disabilities that it covers and can be very strict on what disabilities it approves. If a disability does not exactly match one from the approved list, then the applicant must go through an exception process which can be lengthy and add extra burden on the approval process. PDI, on the other hand, has a much broader scope of what is considered a condition that deserves benefits. Often insurers will begin paying out benefits for a PDI without needing extensive proof that the policyholder cannot work and may even be completely satisfied with the medical records from a family doctor, whereas the Social Security Administration is going to require extensively documented medical records from one or more specialists in order to approve SSD. This is where a Social Security Disability attorney can be of assistance. Applying for the benefits can be difficult enough but not everyone knows what to do after a denial.

PDI does not come without its list of issues either, the main one being price. Sometimes some employers will offer some sort of short or long term disability insurance to their employees, but most of the time PDI is an optional benefit that can cost quite a bit extra – sometimes up to as much as 3% of the policy holder’s annual income. The term length and amounts paid out are often selectable, but be aware that the best coverage is going to cost significantly more than the base coverage. However, this is where SSD shines. An employee working and living in the United States of America is most likely paying into Social Security already and does not require any special contract, policy, or paid premium in order for the benefits to be available.

Fortunately, there is nothing that says someone cannot receive both at the same time. There are even some long term PDI policies that will require the policyholder to apply for SSD after a set amount of time has passed.

Our Social Security Disability Team

Though the process of applying for SSD can be difficult and long we at Rue & Ziffra are ready to help you through the process. With over 182 years of experience at our firm, we have seen over 28,000 cases and this gives us the knowledge to be a formidable ally when it comes to fighting for your justice. Especially since we are proud to have the only certified Social Security Disability expert in both the Flager and Volusia counties. In addition to this, we believe that good communication is essential and we offer attorneys who speak English, Spanish, and Russian in order to serve our community in the best possible capacity.

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